Need help in analysis

[Jack Srimani]

Hi
I have seen a two unit house in a decent neighbourhood. The first floor has three bedroom and two bath while the upper unit has one bed room and one bath. The owners are selling this property and were in this one for last two years.
According to my research the rents are 900 in the lower unit and 500 in the upper unit. Lots of updates have been done and it looks nearly like a brand new house with fence backyad and nice porch for the lower unit.
They are asking for 110000. This figure in no way close to the 2 % rule. However from the look of the home it does not look too much of maintenence expense will be there.
Tax is 2200 dollars.
My first question is if this is a viable option to buy for rental investment.

The second question is how to make sure that there will be guaranteed renter after investing in such property. Is there any prior research I can do to know if I will get renter after buying such property.

I appreciate any help. Thanks.

[Jon Holdman]

Read in the rental property forum. Especially in threads about the "50% rule". There are various examples of actual expenses. Some that come to mind include

- taxes
- insurance
- maintenance (mostly caused by tenants, provided you start from a good starting point)
- vacancy
- make read costs between tenants
- property management (which you can earn for yourself if you do this work)
- utilities (at least between tenants, but also for lienable utilities when tenants disappear owing a bill.)
- lawn care (especially on multis)
- snow removal
- pest control
- any damage in excess of security deposit
- lost rent due to eviction
- eviction costs
- other legal costs
- accounting costs
- major capital items like furnaces, roofs, sewer lines.

Don't fall into the trap of trying to break these all out for your analysis, then trying to squeeze each of them down. You can make up whatever number you want when you do the analysis. The reality will be whatever it is. Some of these are pretty well known and are more or less fixed. Some are highly variable. Variable doesn't mean non-existent, unless you're lucky. If you own one property for five years, you can be lucky. Or you can be really unlucky and have a major expense very quickly. If you own 20 properties for 20 years, you'll be much closer to that overall 45-50% number.